Credit Report

An assessment indicating a person’s history of borrowing and repayment.

A credit report points out the total amount of all past and present debts of an individual as well as any missed debt payment. The debts include money owed through credit cards, mortgages, auto loans and others. A credit report also shows the individual’s addresses and the number of times the person has moved from one city to another.

The three major companies which track credit and payment histories of individuals in US include Experian, Equifax and Trans Union. They obtain information for credit reports from different trusted sources including public records, employers and creditors.

Credit report information helps lenders decide on a loan applicants’ borrowing potential. Credit reports which indicate late payments on a debt create a possibility of the lender charging the borrower a higher interest rate or denying the borrower any credit. A credit report which does not indicate any payment history also has the effect of the borrower being charged higher interest rates since there is nothing to assess and decide if they will make payments or not. Lenders generally depend on an individual’s borrowing and repayment history to decide as to whether to lend or not—and if they decide to lend, the possible amount they should lend an individual.